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Pay no attention to that rationing behind the curtain

Our readers and my fellow contributors may remember, back when Obamacare was in the making, that we had some posts about the rationing implicit in aspects of the bill. In particular, we highlighted the limitation on "excess" readmissions as a probable locus of rationing. One of our liberal commentators insisted that it was not so. No rationing would take place.

Well, surprise, surprise! The board that oversees the rules for Medicare put rules in place to implement precisely that requirement (preventing "excess" readmissions), and whaddaya know? Those rules have already killed one person.

Here is the long version. The short version, as I understand it, goes approximately like this: Frank Alfisi was on kidney dialysis on an outpatient basis. He felt too sick one day with symptoms like those of a tummy bug to go to his outpatient dialysis, so he skipped it. Within a day or two thereafter he was so sick (from not getting the dialysis on schedule) that he couldn't do dialysis on an outpatient basis but needed to have it as an in-patient. But the Medicare rules said that he wasn't allowed to be admitted as an in-patient for "mere" dialysis, because dialysis alone isn't expected to keep one in the hospital for at least two midnights. So the doctors had to delay his dialysis until he had seizures and other sufficiently bad symptoms which would allow them to admit him with the expectation that he would stay at least two midnights. (I'm pretty sure he eventually got the dialysis, but the article is a little unclear on that point.) The excessive delay in regular dialysis messed him up so badly that he was never able to go home again; he suffered greatly for a month or two and died.

The idea that this was a smart move to save the taxpayer money is something of a joke. Had he been able to have his dialysis, as an in-patient, just a little late, he could probably have gone back home to living on his own and having regular out-patient dialysis. As it was, he had to be cared for in various institutions for almost two months at the end of his life, which was presumably more costly than that same period of time living back in his home as he had been before. I suppose that in a sense one might regard this as a long-run savings, since he died and didn't need dialysis treatments thereafter, but that wasn't supposed to be the point. The point of this (stupid) rationing rule was allegedly to prevent frivolous, unnecessary admissions and re-admissions to the hospital. What the rule-makers didn't reckon with is that just maybe there aren't so many frivolous admissions out there as they thought. Maybe even short-term admissions could be actually medically called for. Maybe they are making things worse for everybody by taking away doctors' discretion in admitting for, heaven forbid, less than two midnights.

As is so often the case, the peculiarly sickening nature of the two-midnight rule lies in the fact that it is not ill-intentioned. It would be easy enough to toss off a conservative pundit quip to the effect that killing Frank Alfisi and others like him was the point of the whole thing to save money long-term on his care, but I honestly don't believe that was the case. No, these centralized managers still believe that the people on the ground, the doctors and nurses, for example, don't know their business as well as the centralized managers and that the bureaucrats can force them to do better and thereby save money. The slogans vary ("evidence-based medicine," "avoiding excess readmissions") but the stupidity is fundamentally always the same: Big Brother knows best. You are being wasteful. Let us help you to be more efficient by micromanagement. But centralized control of an economic system is no more likely to work well in medicine than in the production and distribution of shoes or bananas. And so, lives are lost pointlessly.

As with so many things in Obamacare, so here: The response to the negative response by doctors has been to delay the two-midnight rule, but apparently only temporarily. Hurrah, hurrah. That just adds unpredictability to the system. I'd be willing to bet that we haven't seen the last of it. If you or your loved ones are on Medicare, you may very well run into it--who knows when and who knows where. And lots of people cannot avoid being on Medicare.

I want to point to this story as a cautionary tale particularly to the well-intentioned. This is the nature of centralized, government-run healthcare. It's not enough to say, "Oh, wouldn't it be nice if we could have government-run healthcare with people in charge who don't want to bump off patients." The fact is that centralized control works badly. This type of stupidity is inevitable. No, it wouldn't be okay if we just had "good people" running the system. No, it is not the case (as I've seen some say) that we ought to expand Medicare to more people. No, and again no. The problems with Obamacare are manifold, but one of the major ones is that it is running in precisely the wrong direction. Instead of making the medical sector more market-based, it puts more middlemen between doctor and patient. The death of Frank Alfisi is just one example of the consequences.

Comments (32)

One shudders to think how much worse it is going to get before the liberal ostriches decide that even THEY can't take it any more, and Obamacare is dismantled - at least the worst parts of it.

Myself, I am hoping that John Roberts comes to his senses and declares to the Obama administration, on the contraception mandate, "I gave you a chance, I put you on warning that there was a very fine line between the law being constitutional and the entire thing being thrown out. Here with the contraception mandate it is clearly unconstitutional, and YOUR ADMINISTRATION is the one that insisted that the whole law requires this provision, so: out it goes, you proved that you couldn't run Obamacare and stay within the constitution."

Since these are Medicare regulations that just happened to be included in the Obamacare law, I suppose they might be kept in place even if Obamacare overall is ditched. Since Medicare itself will still be with us. I suspect that even if we are ever fortunate enough to get rid of Obamacare it will leave a lot of hangover in Medicare that we will never be rid of.

The doctors could have been more creative. They could have turned their heads while he, "fell," and broke his arm or claimed that he might be having a drug reaction to some obscure drug for a skin rash (easy to create) and they needed to, "run tests," that would require two midnights in the hospital.

Part of the problem is both the hubris and the fear that invades the medical establishment: too certain of their diagnoses, but afraid to get fired or have to get sued if they buck the system. The thing is, the doctors certainly did not treat Mr. Alfisi as they would want to be treated.

The problem with that, Tony, is that the contraception mandate is clearly constitutional. Ever heard of Employment Division vs Smith? Thought about what it would mean if anyone could ignore any law for religious reasons? I guess not. This case will be decided based on the Religious Freedom Restoration Act, not the First Amendment. Like many "constitutional conservatives" you actually know very little about constitutional law.

Badly compared to what? All of the hard evidence shows that socialized medicine is cheaper and more effective than the system we used to have and theoretical market systems. True "free market" healthcare has never been tried in a modern country because it is stupid, which Arrow essentially proved in his classic paper. An average citizen cannot make informed decisions in the healthcare market and must depend on the advice of his or her doctor, which makes the idea that a competitive market can exist completely laughable.

As you can see from this data, when the government has the ability to negotiate with healthcare providers the costs of drugs and other healthcare services goes down substantially. We know what works, it's not up for debate. Conservatives deny the truth because of their ideology, but they do not have a real argument. The idea that socialized medicine doesn't work is a fantasy.

As for the question of rationing, there is no system in which rationing does not occur. The question is whether the government will make those decisions, and this is one of the cases where I think that leaving things to the market is fundamentally unjust. Letting a 5 year old child die because she was born with a serious condition and her parents can't afford treatment is unconscionable given how wealthy our society is, as is allowing those with preexisting conditions to suffer because of something they could not control. Additionally, the employer provided insurance model was created due to government policies that encouraged it. So the people that are frozen out of the private healthcare market are stuck outside the system *because* of actions taken by previous sessions of Congress. I would argue that the government has a moral responsibility to provide them with insurance given that it created the market in which they are denied access to healthcare. You could argue that we should transition to a market based systems, but letting any of those people die in order to transition would be unjust if we buy the argument that government has an obligation to care for people frozen out of the system due to its previous actions. This should never have been a problem in the United States, we should have embraced socialized medicine like Europe did after World War 2. Failing to do so has created an enormous mess.

All of the hard evidence shows that socialized medicine is cheaper and more effective than the system we used to have and theoretical market systems. True "free market" healthcare has never been tried in a modern country because it is stupid, which Arrow essentially proved in his classic paper. An average citizen cannot make informed decisions in the healthcare market and must depend on the advice of his or her doctor, which makes the idea that a competitive market can exist completely laughable.

Let's break this down for analytic purposes:

1) "socialized medicine is cheaper...than the system we used to have [before Obamacare] and theoretical market systems." I agree that when you look around the world at centralized, social systems for providing insurance or medical care, they are cheaper than the system we have in the U.S. -- pre or post-Obamacare (for the rest of my comments I'm just going to assume that Obamacare is going to fail spectacularly in controlling costs since that's been the case so far). But because we all know from economics class 101 that there is no such thing as a free lunch we have to ask the obvious follow-up question: how do these socialized systems control costs? By rationing care via bureaucrats. It's that simple (actually, it is more complex because some countries ration via insurance like Germany and some do it directly via their providers like Britain and the famous NHS).

2) "more effective" -- wrong. If by effective you mean treating sickness, then the U.S. does as well if not better than most socialized countries at healing the sick. There are all sorts of studies out there that look at this question, here is just one I found with a quick Google search:

"They find that the ratio is lower in the U.S. for all types of cancer except cervical cancer, suggesting that the U.S. health care system is generally more successful in the detection and treatment of cancer."

3) "True "free market" healthcare has never been tried in a modern country because it is stupid, which Arrow essentially proved in his classic paper."

Again, I agree that no country really has a pure free market healthcare system, but we'll have to agree to disagree about why that is so. Certainly there are examples of limited markets operating in the provision of medical care and those markets seem to do well in bringing down costs while providing services that people need. Just as we'd expect. As for Arrow's classic paper on the problem of asymmetric information, there are many ways to solve this problem: Arrow himself simply suggested some form of medical licensing scheme to protect doctor quality (and since this problem exists with many consumer goods, you also have tort law to deal with bad actors). Indeed, Professor Arrow himself pops up on one of my favorite free market healthcare blogs to make this point (in the context of a post that talks about how technology might help solve the asymmetric information problem):

So to conclude, let me say a word about rationing. It is a category error to say that rationing via bureaucrat versus letting individuals trade their goods and services freely only to be constrained via prices are equivalent. They are not (morally or in terms of efficiency). I do agree with you that the poor will always be with us -- how we help the poor get what they need, whether that is food, shelter or medical care is an interesting question. Why you liberals always turn to "Congress" for a solution when there is a problem is strange. Must be a power trip. And assume for a minute that you are right -- private charity and local/State government would be overwhelmed at helping all the sick who can't provide for their own care. Why do we have to mess up roughly one-sixth of the entire economy instead of just providing the sick with the money they need is beyond me.

Chicken, I have to speak up for the doctors. The article portrays them as very angry with the rule and as trying everything they could think of, short of anything fraudulent, to have an excuse to admit him. It just took a while--like, until it was too late for him ever to go home again--for him to get sick enough to need to be there two nights. Arguably, some of the creative solutions you suggest would not have gone down well with anyone investigating Medicare fraud. I'm not saying that makes them necessarily morally wrong, but it explains why the doctors instead did things like taking x-rays and things they could do in the emergency rooms in hopes of finding something that would have justified a two-midnight admit. Evidently it's not too easy to justify saying someone really needs to be admitted for at least two midnights.

Dunsany, in this case, the centralized control obviously worked badly as compared to *way less micromanaging.* It's interesting to me that you don't deal with the case at hand. Even _ordinary_ health insurance, though it certainly has its problems, didn't used to and often doesn't now make these kinds of silly rules in an attempt to control its costs. Look, do the Medicare regulators just make up these things arbitrarily to control costs? No, they obviously think that the doctors _really do_ admit people frivolously. They obviously think that they _really are_ controlling costs that are _medically unnecessary_. They think this is some sort of simultaneously smart and compassionate cost-control move. Well, as the story (and I'm sure there are many more) of Frank Alfisi shows, they are wrong.

So whatever we do to bring down healthcare costs in America, this is not the way to go. The last thing we need is more people saying, "Hey, we can tell that you don't really need that hospital admit, even though we're not the doctor in the situation." Because that's dumb, not smart.

As Jeff says, of course people will make monetary decisions with the money they have available to them about how to spend it. To call that rationing is perverse.

One of the biggest problems with this type of rationing is that, because it is so detailed and so micromanaging, it isn't the kind of thing that Medigap insurance or other forms of payment are likely to fill in for. It would almost be better for Medicare not to pay for dialysis *at all* and for senior citizens to be given some relatively simple explanation of that fact ahead of time and have the opportunity to buy top-up insurance that would pay for dialysis than for some itsy-bitsy rule to come up out of the blue like this and cause people's death.

Notice, too, that no one even offered Alfisi and his family the opportunity to pay himself for that single stay for that single instance of dialysis. Maybe he or his family couldn't have afforded to do so, but the issue didn't even come up. My guess is there is probably some legal block to it. But later, when he was about to be kicked out of a rehab institution, the institution threatened to drop him off at his house unless they could pay $5000 per week. That sort of harsh spirit might have actually done more good if it had been brought up at the very outset for that single dialysis treatment he needed. But no. Medicare apparently has iron control over what treatment senior citizens can have.

>ut because we all know from economics class 101 that there is no such thing as a free lunch we have to ask the obvious follow-up question: how do these socialized systems control costs? By rationing care via bureaucrats. It's that simple (actually, it is more complex because some countries ration via insurance like Germany and some do it directly via their providers like Britain and the famous NHS).

Not quite. I was talking about how the government directly negotiating with drug manufactures and other medical companies reduces the cost of various treatments. That is why drugs are so cheap in Canada and so expensive in the United States. That is true of drugs that are not "rationed" in any meaningful sense just like it is true of expensive drugs used to treat serious illnesses.

>"more effective" -- wrong. If by effective you mean treating sickness, then the U.S. does as well if not better than most socialized countries at healing the sick. There are all sorts of studies out there that look at this question, here is just one I found with a quick Google search:

This I don't fully disagree with, but I think you are painting a fairly simplistic picture. We have good cancer treatments, but that is because our doctors are well trained and we use effective treatments. It actually has very little to do with the structure of healthcare market. When I say effective I mean that these systems provide coverage to virtually of their citizens and consume less money as a % of GDP. I suppose it is possible to argue that our doctors would be worse under a socialized system, but I cannot see the force of the argument.

>Again, I agree that no country really has a pure free market healthcare system, but we'll have to agree to disagree about why that is so. Certainly there are examples of limited markets operating in the provision of medical care and those markets seem to do well in bringing down costs while providing services that people need

Can you give examples? Are you talking about cosmetic procedures like plastic surgery? My view is that limited markets are fine as long as the government is heavily involved.

> Just as we'd expect. As for Arrow's classic paper on the problem of asymmetric information, there are many ways to solve this problem: Arrow himself simply suggested some form of medical licensing scheme to protect doctor quality (and since this problem exists with many consumer goods, you also have tort law to deal with bad actors). Indeed, Professor Arrow himself pops up on one of my favorite free market healthcare blogs to make this point (in the context of a post that talks about how technology might help solve the asymmetric information problem):

Certainly those things help, but I do not grant that they solve those problems. I support such measures myself, but that has nothing to do with whether we should have socialized medicine. It's also worth pointing out that Republicans want to weaken tort law in this area, not use it to police doctors.

>So to conclude, let me say a word about rationing. It is a category error to say that rationing via bureaucrat versus letting individuals trade their goods and services freely only to be constrained via prices are equivalent. They are not (morally or in terms of efficiency). I do agree with you that the poor will always be with us -- how we help the poor get what they need, whether that is food, shelter or medical care is an interesting question. Why you liberals always turn to "Congress" for a solution when there is a problem is strange. Must be a power trip. And assume for a minute that you are right -- private charity and local/State government would be overwhelmed at helping all the sick who can't provide for their own care. Why do we have to mess up roughly one-sixth of the entire economy instead of just providing the sick with the money they need is beyond me.

I disagree completely. The private market does ration things using money, that is an accurate description of what is going on. The difference between us is that you seem to think this form of rationing is intrinsically good, and I do not understand why. As for why I turn to Congress, it is partly because no one else is going to solve the problem and partly because socialized medicine is simply more efficient. New reports are showing that Obamcare may have saved over 15,000 lives, and well known study from Harvard Medical School showed that thousands of people were dying due to lack of insurance before Obamacare became law. If Christian charities were going to help those people they would have already done so.

What do you mean give them the money that they need? Healthcare policy is complex and it's easy to say we should do X without explaining how.

The problem with that, Tony, is that the contraception mandate is clearly constitutional. Ever heard of Employment Division vs Smith? Thought about what it would mean if anyone could ignore any law for religious reasons? I guess not. This case will be decided based on the Religious Freedom Restoration Act, not the First Amendment. Like many "constitutional conservatives" you actually know very little about constitutional law.

There are four classical freedoms granted to Christians by virtue of their baptism, according to St. Bernard of Clairvaux: freedom from sin, freedom from misery, freedom from necessity, and freedom from the State. The middle two are only realized partially in this life. The last freedom means that Christians are not nor can they be obligated to follow any mandate or aspect of a constitution that contradicts the dogmas and doctrines of Christianity. This freedom is vouchsafed by God, himself, by virtue of the First Commandment. More specifically, it gives Christians the freedom to ignore the State precisely when it commands evil. Contraception is an evil, therefore, no matter who supposedly (and foolishly) finds a reason for it in the Constitution, that ruling is not binding on Christians and because of the intimate connection between the Divine Law and the Natural Law, it is, in reality, binding on no one.

The Laws of Man are not absolutes. In order to be active, they must meet certain criteria, such as reasonableness, goodness, being unburdensome, etc. The goodness of a law must not contradict the criteria for goodness established at a higher level. To pretend that there is not a higher order of Goodness beyond the dictates of the positive law is to make man the sole arbiter of life and liberty, which proposition can be clearly demonstrated to be false, because, even in the realm of nature, man cannot control for seemingly random destructive forces, such as tornados and earthquakes, which may, at their pleasure deprive any man of either life or liberty, as those terms are understood by man.

Religion is that freely chosen set of obligations that binds a man to his God, but God is not an arbitrary construct of man (which would lead to a circular definition), but someone knowable through reason and revelation (and the two cannot be divorced). If there is one God (and there must be, because God is not a composite being, but a simple being), then one cannot bind oneself, simultaneously to God and something opposed to God. If there is an underlying morality within the Constitution, then that morality must either reflect the Divine Order of goodness, even remotely, or it is, to whatever extend or from whatever specific aspect it wanders, evil. Religion may seem to some men to be something merely arbitrary, like a fable, but it is not. It is both attached to reason and transcendence and has a science more exacting than anything dreamed of by lawyers. That some people get religion wrong is no more shocking than the fact that some men get laws wrong, but to say that one should hold to laws when in conflict with religion is to make the law into a religion and man into a god.

In truth, the case will not be decided on the basis of the Religious Freedom Restoration Act, nor the First Amendment. It has already been decided on the basis of the First Commandment (which is certainly not an amendment and not a mere positive law of man) and found wanting. Stupid men simply take it upon themselves to defy their Creator and appeal to their own appetites rationalized through arbitrary laws. Apparently, they have not yet discovered that freedom from sin that would be theirs should they turn away from themselves and back to God.

Oh, not to be too sarcastic, or to repay insult with insult, but perhaps the rebuke can be made: like many liberals, you seem to know very little about religion.

I know the doctors tried, but it seems to me that they let themselves be too trapped by an arbitrary law. The adage, "necessitas non habet legem," necessity has (or knows) no law," should have been all they needed to appeal to to act and to hell with the consequences. Jail time is worth it to save a man's life. Apparently, to be as charitable as possible, it seems that they were hoping that a complication not too serious would develop from withholding dialysis and they guessed wrong. For all of their good hopes, the were really playing Russian roulette with the man's life instead of being strong men and good doctors and doing what they should have. I could be wrong and possibly am, since I do not have enough specifics. I am going off of what I read and understand in your synopsis. I know the doctors tried, but it seems they had either a failure of imagination or courage. In either case, that man should not have died.

I know quite a bit about religion chicken, but I am an atheist and do not believe in your god. It will be hard for him to judge anything considering that he is a fairy tale. You might as well tell me that I will be brought before Harry Potter's Wizengamot or forced to deal with the judgement of Aslan.

I do apologize for my last snarky remark. It is uncharitable to return like for like in evil. To put the arguement in a purely material context, if a law were passed that said tha pi were exactly 3, would I be obligated to follow it? Surely, that law is Constitutional. Pi is just a number, after all.

Before you go to bed tonight, I want you to first pray, then when you are done, repeat this phrase 100 times: "there is no such thing as a free lunch".

You say, as if government has magic powers:

I was talking about how the government directly negotiating with drug manufactures and other medical companies reduces the cost of various treatments. That is why drugs are so cheap in Canada and so expensive in the United States.

Wrong again. It is true that purchasing a particular drug in bulk can help bring the cost down -- this is also economics 101 and so when you guarantee a supplier that you will buy 100 units of his product instead of 10 units, he's more willing to give you a good price. I agree. But that's not really what's going on with Canada and Europe -- those governments are just forcing the drug companies to sell their product at a cheaper price, which leads the drug companies (must of which are here in the U.S.) to charge higher prices in America:

"The Institute of Medicine's estimate that lack of insurance leads to 18,000 excess deaths each year is almost certainly incorrect. It is not possible to draw firm causal inferences from the results of observational analyses, but there is little evidence to suggest that extending insurance coverage to all adults would have a large effect on the number of deaths in the United States."

"Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years..."

(To be fair, they did find it helped reduce depression and financial strain!)

Dunsany, if you are going to keep popping up over here in the comments and making crazy unfounded claims about liberal, statist programs, I suggest you just stop -- the evidence will not be kind to your fantasies and it gets tedious after awhile refuting all your nonsense. If I want to argue with the DailyKos, I'll go over to their website and torment myself with the real deal.

>hose governments are just forcing the drug companies to sell their product at a cheaper price, which leads the drug companies (must of which are here in the U.S.) to charge higher prices in America:

They aren't forced to charge more for drugs in America, that is a distortion. They charge more because they can and are rational actors. It is also a mistake to say that drug manufactures are "forced" to sell their drugs at a given price in such countries. They negotiate with local governments and end up coming to reasonable arrangements. Additionally, I see no reason why we should subsidize R&D for the rest of the world. Is America a charity? The fact that you are already lying and distorting things so much does not speak well of your arguments.

>"The Institute of Medicine's estimate that lack of insurance leads to 18,000 excess deaths each year is almost certainly incorrect. It is not possible to draw firm causal inferences from the results of observational analyses, but there is little evidence to suggest that extending insurance coverage to all adults would have a large effect on the number of deaths in the United States."

But don't allow "facts" to get in your way. Does the Institute of Medicine have anything to do with Harvard Medical School? Hmm? Do you realize that the institute of medicine study is from 2002? Do you have any idea what you are talking about? Doesn't seem like it.

>u are going to keep popping up over here in the comments and making crazy unfounded claims about liberal, statist programs,

Additionally, I see no reason why we should subsidize R&D for the rest of the world. Is America a charity?

A telling comment, Dunsany. Do we want the drugs to exist or not? It seems reasonable to conclude that a lot of the price of drugs _is_ a need to recoup R & D. Which means, in other words, that it's not just Evil Capitalists Price-Gouging the Poor Masses. If the cost is not shifted to the U.S., e.g., because of artificial govt. price-capping, perhaps new drugs will simply not come into existence. Which isn't necessarily a good thing for anybody.

Generally the point about R & D is made on the right, not on the left, as an explanation for high drug costs and as a criticism of price-capping in foreign countries and the effect this has in the U.S. You are using it to argue that we should enforce top-down price-capping as well, neglecting to note the plausible effects on R & D in the future.

Chicken, you raise an interesting question about truth-telling: Suppose, for the sake of the argument (and I think this may be correct), that the doctors would not be able to admit him unless one of them signed something that said, in so many words, "By signing this I certify that, in my best medical judgement, the nature of this patient's condition will require a hospital stay covering not less than two midnights and the day in between." And suppose that they did not in fact believe that to be true during the crucial time period after he showed up. Would they have been justified in signing anyway? Would it have been a lie? Does this get us into the whole "is it ever okay to lie to the Nazis to save the hidden Jews" kind of question? Not that I'm trying to start a whole debate on that question. I'm rather wondering whether, in fact, this is that type of situation--where one would have to engage in at least the administrative version of a lie, by one's signature, to get the man the dialysis as quickly as he needed it.

>A telling comment, Dunsany. Do we want the drugs to exist or not? It seems reasonable to conclude that a lot of the price of drugs _is_ a need to recoup R & D. Which means, in other words, that it's not just Evil Capitalists Price-Gouging the Poor Masses. If the cost is not shifted to the U.S., e.g., because of artificial govt. price-capping, perhaps new drugs will simply not come into existence. Which isn't necessarily a good thing for anybody.

I'm willing to have the government invest in research and for other countries to join us in that effort, but I am not willing to let Americans die to subsidize the development of new technology. As a "pro-life" conservative it seems hard for your to argue against my position, but one should never underestimate the depths of Christian hypocrisy. Why not sacrifice a few Americans? It's for the greater good after all.

I'm pretty sure they would be blocked from admitting for the dialysis, therefore the dialysis doesn't happen, if they don't fill out and sign the relevant paperwork. Doctors sometimes seem like they have dictatorial powers, but when it comes to something like this, a system of checks and balances kicks in big-time. Perhaps mental reservation would work. I wish I knew more about exactly what it would have taken.

Hospitals are not required to file for Medicaid or Medicare. They own the equipment, after all. They can do what they want. It is mind-lock to be so helpless in the face of paperwork that can prevent necessary life-saving things to be done. Alfisi did not die because of paperwork or Medicare. Actually, he died because he was poor, first and foremost. If a rich man needed the dialysis, he could have just paid for it out of pocket and the hospital would have gladly accepted him as an outpatient.

Here are several things the doctors and hospitals could have done:

1. They could have treated him, pro bono, and let the fact, "leak," to the newspapers that the hospital did this as a life-saving measure in the face of big, bad Medicare. The patient wins, the doctors look like heroes, the hospital reaps big civic rewards and publicity for being known as a compassionate hospital where no one need die from red tape, the government is not out a dime, so they win, and the public is made aware of this failure in Medicare regulations, which might start action.

2. If worst came to worst, the doctors could have passed a hat to take a collection to pay for the one-time outpatient dialysis. I am sure the doctors have a spare grand lying around.

3. They could have decided to, "show," dialysis to interns as a teaching technique. Oh, we need a patient. Well, Mr. Alfisi volunteers, so we will write it off as a teaching aid.

4. The staff is not really sure that the latest shipment of dialysis needles are safe, so, of course, they need to be tested. Oh, look, Mr. Alfisi is here. Here's the waiver if anything should go wrong. Let's go.

5. Honest, the name on the chart said, Alinsky. I have no idea how the charts could have gotten mixed up. Maybe, Alinsky had an appointment and didn't show.

6. Paperwork? The man was going to die. What paperwork did you want me to fill out? His death certificate?

7. Really, Mr. Alfisi, how long have you been having these stomach pains? Well, it could be nerves or a gastric ulcer. We need both a psych consult and an upper G. I.

8. There was a patient in the dialysis room? Really? What are the odds that no one saw him? I mean, I'll ask around, just to be sure, but do you think we would be so unprofessional?

9. Sign the Medicare form? Certainly not. Man does not live or die by Medicare, alone. Alfisi had his dialysis on me. My treat.

See, as I say, this was, probably, a failure of either imagination or courage or groupthink mind-lock gone horribly wrong.

But don't allow "facts" to get in your way. Does the Institute of Medicine have anything to do with Harvard Medical School? Hmm? Do you realize that the institute of medicine study is from 2002? Do you have any idea what you are talking about? Doesn't seem like it.

Actually, I do have an idea of what I'm talking about, although perhaps I should have been clearer. I linked to Kronick's work not because it was a direct attack on the Department of Medicine at Cambridge Health Alliance, which is affiliated with Harvard Medical School (the folks who did the study you like) but because his study casts doubt on the very idea that insurance coverage is associated in a formulaic way with morbidity and mortality. Which is exactly what the Oregon study did as well.

I know that liberals like Alan Grayson and the cast of characters over at MSNBC liked to quote from that "45,000 deaths" study as if it were a scientific fact, but social science doesn't work that way (for either side) and so it is not surprising in the least that when other researchers have looked at the issue they come to the conclusion that there is no link between having insurance and general health outcomes.

Finally, if you think that the government is going to do a bang up job developing drugs that will help heal the sick, I've got a couple of bridges in downtown Chicago I'd like to sell you if you might be interesting in looking at them...

A telling comment, Dunsany. Do we want the drugs to exist or not? It seems reasonable to conclude that a lot of the price of drugs _is_ a need to recoup R & D. Which means, in other words, that it's not just Evil Capitalists Price-Gouging the Poor Masses. If the cost is not shifted to the U.S., e.g., because of artificial govt. price-capping, perhaps new drugs will simply not come into existence. Which isn't necessarily a good thing for anybody.

Generally the point about R & D is made on the right, not on the left, as an explanation for high drug costs and as a criticism of price-capping in foreign countries and the effect this has in the U.S. You are using it to argue that we should enforce top-down price-capping as well, neglecting to note the plausible effects on R & D in the future.

You are engaging in the sunk cost fallacy if you are trying to invoke the notion that companies must recoup their high R&D spending. Rationally, a company should regard previous R&D expenditures as an unrecoverable sunk cost and try to maximize the financial value that they have on their assets (that is the intellectual property on the drugs that have been demonstrated as clinically effective in controlled studies or those that have promising potential in prior clinic trials). Furthermore, the high costs of pharmaceuticals reflects the high cost of R&D, in the sense the outrageous R&D costs (including the costs of failed drugs that never make it to the clinic), serves to discourage other firms from conducting drug discovery efforts, hence restricting supply and thereby increasing the marketing power of those possessing the intellectual property for clinically effective drugs. IIRC, Bernard Munos actually argued that FDA regulation serves to benefit drug companies by imposing a barrier to entry because in order for a drug to go to market in the United States, it must have the imprimatur of the FDA. While this does not necessarily preclude the sale of pharmaceuticals in regions with a more lax regulatory regime, the pharmaceuticals without FDA approval could also serve more limited markets internationally, not withstanding that they likely have dubious effectiveness (despite its theoretical mechanicism of action and in vitro efficacy) since it has not demonstrated safety and reached an important end point with statistical significance. In a way, an FDA approval, even though some libertarians say it trammels the development of novel entities, it essentially acts as an Ivy League degree, as those degrees are fairly rare and distinguishes one as a highly intellectually competent individual. An FDA approval is quite valuable in the market, and prescribes would more likely respect a drug with an FDA approval for a given indication than one that only has optimistic results in a phase 2 trial.

I'm willing to have the government invest in research and for other countries to join us in that effort, but I am not willing to let Americans die to subsidize the development of new technology. As a "pro-life" conservative it seems hard for your to argue against my position, but one should never underestimate the depths of Christian hypocrisy. Why not sacrifice a few Americans? It's for the greater good after all.

More of these conservative Christians believe that foreign wars serve the national interest or even make the world a freer place, while they just merely exert US geopolitical influence to deal with problematic regimes.

>) but because his study casts doubt on the very idea that insurance coverage is associated in a formulaic way with morbidity and mortality. Which is exactly what the Oregon study did as well.) but because his study casts doubt on the very idea that insurance coverage is associated in a formulaic way with morbidity and mortality. Which is exactly what the Oregon study did as well.

Sure you did. I simply don't believe you, and I am going to be polite and end our conversation rather than write a long post about being an intellectually dishonest liar. This is your blog after all. If you actually are interested in the truth, as opposed to a partisan narrative you wish to believe, red up on the study mentioned here.

Actually, for a company to try to recoup R & D is not for the company to commit the sunk cost fallacy. If they did not have the _expectation_ of being able to recoup the cost, they would be less likely to engage in R & D in the first place. Thus we will influence their long-term plans for R & D if we prevent them from recouping the cost.

Gotta love the reference to foreign wars. After all, W4 has always been _such_ a hawkish site on foreign wars./sarc But one can hardly expect nameless trolls to pay attention to anything like that.

Jeff, your "evidence" that the Oregon study is not associated with morbidity and mortality is the fact that there were no significant changes in a few biomarkers (cholesterol levels, glycated hemoglobin, and blood pressure), and these biomarkers are difficult to alter with substantial lifestyle intervention This study can be considered to be a 60,000 patient, with the (invisible) control group being the former patients' health status before they won the expansion draft. In contrast, the phase III torcetrapib trial (which failed due to increased cardiovascular events in the treatment arm perhaps due to increased aldosterone levels) has about a total of 15,000 patients in the control or treatment arms, but of course, that trial was powered to detect side effects and the clinical end point of a pharmaceutical agent known to affect substantially HDL and LDL levels and likely other biological system. The Oregon study, in contrast, only compared the previous health status of Mediaid applicants who won a lottery without them being selected to undergo some some drastic lifestyle or pharmaceutical intervention; the sample was fairly heterogeneous regarding their exposure and need for medical treatment. In other words, one should not expect significant alterations in those biomarkers because not everyone who benefited would need to take drugs for dyslipidemia, diabetes/metabolic syndrome, or hypertension (and a significant proportion who are already diagnosed with those conditions are taking those drugs and would not be affected by major changes in their pharmaceutical regiment, except perhaps increased treatment compliance rates, when they have expanded coverage). Furthermore, treatment would likely be self-limiting; some endocrinologists, for instance, are unwilling to prescribe sulfonylureas to type II diabetics, unless the patient's A1C is quite high due to the class' risk for cardiovascular events. Indeed, the some speculate (and I find it quite reasonable and highly likely) that the failure in the ACCORD and ADVANCE trials to aggressively threat type II diabetes by aiming for "low" A1C levels (6.5 or 6.0) was to the heavy usage of sulfonylureas and thiazolidinediones causing an increase in mortality offsetting the benefits from better glycemic control. Note that this was considered an "intensive" intervention, meaning that most endocrinologists and primary physicians were often reluctant to go to those lengths in order to achieve the low A1C levels.

Thus, there does not seem to be any epidemiological reason to expect that the expanded health care coverage would affect those biomarkers in a large, heterogenous sample.

Actually, for a company to try to recoup R & D is not for the company to commit the sunk cost fallacy. If they did not have the _expectation_ of being able to recoup the cost, they would be less likely to engage in R & D in the first place. Thus we will influence their long-term plans for R & D if we prevent them from recouping the cost.

The R&D cost is the price of doing business, and it also acts as a competitive barrier that the pharmaceutical company can later leverage in the marketplace because they are few companies that can actually discover and develop new molecular entities due to the exorbitant costs involved. (In other words, they benefit from the high costs of development.) In actuality, the prices reflect the market power due to the significant barriers of entry in creating clinically effective molecular entities and the desperation of various stake holders, making demand for the drug fairly inelastic, not some necessity that they should recoup the cost of development AFTER they have been defrayed (since market forces are indifferent to the prior development costs). Yes, companies should expect to recoup the development cost later on before they commit themselves to discovering the molecule and conducting the trials.

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Dunsany was referring to the hypocrisy of typical American Christians, not the views of anyone on this particular blog. My remark was not directed at one here in particular.

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I have a name; have some fun and use google translator. The name is in katakana and is in English, disregarding the rendering of the syllabification. I put it there in good faith (and for some entertainment) and I did not want to be a "nameless troll".

his study can be considered to be a 60,000 patient, with the (invisible) control group being the former patients' health status before they won the expansion draft.

I made an egregious mistake interpreting (since I did not read it) the methodology of the Oregon study, since it did not study all 30,000 people who were selected in the lottery while comparing their prior health history, but rather surveyed a sample (located in Portland) and only 5842 controls and 6387 lottery winners responded. This further reinforces the conclusion that the study lacked the statistical power to detect changes in those biomarkers, especially when it has similar power (actually smaller) than a clinic trial that is investigating a pharmacological active agent.

Google translate could handle your name but couldn't figure out that quote you left us. Yes, the Oregon sample was small and yes the new study from Massachusetts suggests that Romneycare is indeed responsible for some reduction in morbidity and mortality:

(1) as I said to Dunsany, these studies are limited in what they can prove either way -- like all social science studies there are just too many moving variables to conclusively say "yes, thanks to this particular piece of legislation that provided person X with insurance for healthcare they survived illness Z which they wouldn't have survived otherwise if legislation X never passed because they avoided going to the expensive doctor since they didn't have insurance." The story is plausible, but again, the factors that have to be considered in making such a claim number in the hundreds if not thousands. I doubt one (robust) regression equation is the end of the story.

(2) even if we grant the Romneycare study its conclusions, as Cannon points out, at what cost do we get those 'healthcare improvements'? Cannon suggests the cost is not worth the benefits which is the consistent conservative story about all socialized medicine. We'd rather have markets do the 'job' of driving down cost in healthcare and for those who are left behind due to poverty, we can always help them out directly via some form of financial aid (e.g. Paul Ryan's premium support plan).

And Dunsany knows nothing about the typical American Christian or their so-called hypocrisy. So I suggest you ignore his demented attacks on our faith and stick to your (so-far) thoughtful analytic/public policy comments.

An average citizen cannot make informed decisions in the healthcare market and must depend on the advice of his or her doctor

Welcome to the wonderful world of technological specialization. The same can be said of most engineering fields. It is also true of the legal system, which is why normal people rely on counsel in court. By your logic, we ought to socialize all engineering fields and the legal profession (now, the latter... that would be funny).

But in reality, the reason why engineering works and medicine doesn't in the areas you complain about is that engineers are more legally accountable for their mistakes than doctors. They also don't get to engage in unethical billing practices, their firms don't get to avoid the majority of contract law during the provision of services and if they financially rape their clients the state doesn't find a thousand and one reasons to not apply price gouging and fraud statutes to them.

I seriously doubt there is anything in the various engineering fields analogous to certain snake venoms which cost a few hundred to produce and can be billed by hospitals for as much as $30k. Forget Steve Jobs; medicine has a reality distortion field. If an engineering firm tried to make a 65-100x profit on a life-saving product, ever attorney general in the union would be crawling out of the woodwork to file charges.

You also speak as if it's not possible for medical boards to review a questionable bill and provide punishment to doctors who act outside of the reasonable interest of their clients or over charge. It's entirely reasonable to expect that and creating it would not be an indictment of the free market. There is no moral right to defraud those who have you on retainer for your services, especially when they are retaining you for expertise they lack.

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